Electric vehicles, including battery electric vehicles and plug-in hybrid electric vehicles, provide a new opportunity to reduce oil consumption by drawing power from the electric grid. As electric vehicle ownership continues to expand, the load on the power grid will increase and power consumption patterns will be altered. Even a low level of electric vehicle adoption could strain the electric infrastructure, particularly in residential areas where as much as eighty to ninety percent of electric vehicle charging is expected to occur. The habits of electric vehicle owners could pose a challenge for electricity providers.
Electric vehicles are likely to have a more significant effect on the electric distribution network than on the generation or transmission systems. The distribution system moves power from the transmission system to end-use customers and includes local distribution lines, transformers, and other equipment to transform high-voltage power into the lower voltage power carried to electric customers. Clustering of plug-in electric vehicles in residential neighborhoods could potentially necessitate the replacement of equipment in the power distribution system. Smaller residential transformers could exceed their design limits if multiple plug-in electric vehicles operate on a single transformer.
Practically speaking, electricity cannot be easily stored on a large scale. As a result, supply and demand must remain in balance in real time. Traditionally utilities have leveraged peaking power plants to increase power generation to meet demand. Demand response works from the other side of the equation, instead of adding more generation to the system, energy users are offered incentives to reduce consumption. Demand response entails customers changing their normal consumption patterns in response to changes in the price of energy over time or to incentive payments designed to induce lower electricity use when prices are high or system reliability is in jeopardy.
Utilities pay for demand response capacity because it is typically less costly and easier to procure than traditional generation. Demand response allows energy users of all kinds to add stability to the power grid by voluntarily lowering their demand for electricity. By aligning the available supply of electricity with the value of electricity to customers at a given point in time, demand response programs increase the efficiency of electricity production. However, to fully harness the benefits associated with demand response programs, customers need access to real-time information from the utility. When communications between the utility and the customer are unavailable, the benefits associated with demand response systems are greatly diminished.
Electric vehicle adoption will have a significant impact on utilities and the power grid. It is important that electric vehicle charging be managed to avoid peak load problems and to help keep the power grid stable.